Sony pins hopes for profit on PlayStation 4, sets February launch in Japan

Sophie Knight

3 Min Read

Sony Computer Entertainment Japan Asia President Hiroshi Kawano poses with the company's PlayStation 4 during a photo session after a news conference in Tokyo September 9, 2013. REUTERS/Toru Hanai

TOKYO (Reuters) - Sony Corp announced the Japanese release of its PlayStation 4 on Monday as the electronics maker braces for a console war with Microsoft Corp that could make or break the Japanese firm’s struggle to return to profit.

Sony said it will launch the PS4 on February 22 in Japan, three months later than its November 15 release in the United States. The basic version of the PS4 will retail for 39,980 yen ($400), in line with its North American $399 price tag. That compares with $499 for Microsoft’s Xbox One, which will be rolled out on November 22.

With the PS4, Sony is hoping its gaming division - one of its key businesses along with its mobile and imaging segments - will power a return to profit after the company rejected a proposal from activist shareholder Daniel Loeb to spin off its lucrative entertainment business.

To hit its numbers, Sony must ensure that the PS4 triumphs in the battle against Microsoft’s XBox One, as well fighting off competition from Nintendo Co Ltd’s Wii U.

The gaming market has changed drastically since the 2006 release of Sony’s last console, the PS3, as casual players have switched to online and free-to-play Internet and smartphone games such as Rovio’s “Angry Birds” and Midasplayer’s “Candy Crush Saga”.

But the consumer shift to smartphones and tablets over PCs could actually support demand for videogame consoles, says Damian Thong, analyst at Macquarie Capital in Tokyo.

“The key market here is core games. I would argue the main competition for the PS4 is not casual gaming, it’s the PC...the good news is that people aren’t buying PCs anymore and they’re buying tablets, so they’re likely to buy a games console,” he said.

Such optimism is backed by research from consultants PricewaterhouseCoopers (PwC) suggesting that the global market for videogames will recover to $86.9 billion in 2017 from $63.4 billion in 2012, with consumer spending on console games increasing to $31.2 billion in 2017 from $24.9 billion in 2012.

Sony said in August that it had received 1 million preorders for the new console, which will be on sale from November 15 in North America and in other regions including Europe, Australia and South America from November 29, in time for the busy pre-Christmas season.

Sony posted an operating profit of 36.36 billion yen ($367.6 million) for the April-to-June quarter, beating market expectations, but leaving it with some way to go to meet its full-year guidance of 230 billion yen.